Prospects Brighten For British Media Scene

Whatever else we can expect over the next few months, one thing's for sure -- the United Kingdom is still riding a wave of new development and change. Of course, the same could be said for 2001, but although we saw an explosion of new digital media entrench themselves as serious contenders for our ad spend, our enthusiasm for them was dampened by constant talk of an economic downturn and of the events after Sept. 11.

But things are looking up economically. The latest reports indicate that the UK's consumer spending last year was its biggest year-on-year increase since 1986. And though the business world is still cautious, a recent survey by The Billet Consultancy of ad spend has revealed that total media budgets are set to rise 1.4 percent this year, albeit from a substantial drop.

With overall advertising down in 2001 an unprecedented 12 percent year-on-year, there's no doubt terrestrial TV has suffered the most over recent months with a loss of 200 million pounds ($284.5 million) in revenue. The big multinational advertisers have cut their TV spend globally. Add to that rising interest in new and more accountable mediums such as the Internet, and SMS messaging, and what we have is an abundance of cheap airtime currently on offer. It's not a situation that's likely to change in the short-term. As such, we're starting to see companies that wouldn't previously have considered using this medium finding it within their reach.

As for digital TV, the jury is still out. Despite having the biggest penetration of digital TV in Europe, the take-up of interactive shopping services has been disappointing. Opinion is strongly divided on who will survive the coming year. The ad industry also has yet to wholly embrace some of the most exciting elements of this medium.

However, recent developments indicate that it might not be long before advertisers can target commercials on a household basis, selecting an audience in much the same way as you might for direct mail. It's an attractive proposition across the board, but particularly for multi-brand advertisers such as P&G that could select different homes for different product commercials (according to their profile), all within the price of a single advertising slot.

Of course, changes like these will completely the change the way advertising is bought and sold. Airtime will have to be measured differently, but it offers a fantastic opportunity to revitalize what is right now a flagging industry.

Even the tried and trusted medium of direct mail looks set for shake up in 2002. The Electoral Roll, the UK's only complete national name and address file, is under review for marketing purposes. Until now, it's been the bedrock of many of our leading direct mail files. Consumers are obliged to complete the form every year, and as such it provides vital data for list building and updating.

However, against a rising tide of consumer concern about privacy issues (fueled by a radio campaign last autumn from the Information Commissioner about data misuse), we expect a ruling by the end of this year that the Electoral Roll will be available for marketing on an opt-out basis only. Of course, opt-out rates could be as high as 30 percent, leaving the DM industry here in need of a fast replacement.

While we're on the subject of data protection, the Internet is also under scrutiny. In a bid to wipe out spamming, the Information Commissioner is expected to rule that personal information can be collected online only on an opt-in basis. Interestingly, the UK DMA is lobbying for an opt-out ruling, however the industry is almost entirely adhering to the former. After all, its market value is higher, and they simply don't want to be caught short.

But of course, we expect to see the most exciting changes in digital media. Technology moves so rapidly that dreams become reality on a month-to-month basis. Internet penetration stands at 39 percent in UK homes but broadband access is only 2.3 percent, partly because the UK has the third-highest charges in the world. If broadband can be made cost-effective it will open up the boundaries for digital media, then consumers here can start to realize the true potential of this medium.

E-mail marketing already has taken a strong foothold and even many of the more traditional established companies like our client Fortnum & Mason are using this medium with success. Lists are plentiful, many with a wealth of data sets behind. Set against a rising tide of ever competitive offers from the ISPs, however, consumers are increasingly switching suppliers or adopting several e-mail addresses simultaneously. It's an issue we undoubtedly all face.

Perhaps the biggest area of growth we expect to see is from SMS messaging. It arrived on our doorsteps less than 12 months ago and since has provided advertisers with a long-sought direct communication vehicle to reach the youth market. Traditionally elusive and direct mail unresponsive, the 18-age group at last is able to be targeted.